With a potential $1b in deferred maintenance needs, USNH prepares a plea to the Legislature

With a potential $1b in deferred maintenance needs, USNH prepares a plea to the Legislature

KEEP was envisioned as a way to attract and keep strong students in the state, arming them with the skills to respond to New Hampshire's future workforce needs and emerging high-tech economy

By Kathleen Callahan

Published: January 27, 2012

Just over a decade ago, the science facilities at the University of New Hampshire were so outdated that the school tried to shield prospective students from even seeing them.

"We used to make every effort to avoid showing students our building," said Bill Hersman, a UNH physics professor who teaches out of DeMeritt Hall, which was originally built in 1914. "The classrooms and research labs in DeMeritt Hall were so deplorable we tried to avoid them even seeing it."

Home to the school's physics department, DeMeritt was prone to vibration because of its wooden frame. Its ceilings were too low to house large equipment, it needed a new roof, and didn't have sprinklers or an up-to-date fire alarm system.

"The rooms I had my labs in had wooden floors. They were creaky, and there were spots where the wood would poke up," said Jacob Berg, a UNH computer science major who graduated in 2009 and who now works as a software engineer at BAE Systems in Nashua. "The lab benches were old, and we used old equipment, from the '70s or '80s."

"All of this academic work was done basically in a dungeon," said Hersman. "Ceiling tiles were letting go and crumbling and damaging my equipment and nearly injuring my students and post-docs."

A long shot?

With its structural deficiencies, DeMeritt wasn't the only science building in the university system that required almost total overhaul to be brought into the 21st century.

Elsewhere on the UNH campus, more buildings cried out for similar repairs. Murkland Hall was built in 1926 and never underwent a major renovation, its foundation deteriorating and facing serious fire safety issues.

Kingsbury Hall, home of the college of engineering, wasn't ventilated, couldn't be air-conditioned, and didn't even have enough power to run all of the computers housed there. James Hall, built in 1930, and Parsons Hall had similar issues.

And that was just at UNH. The only science facilities on the campuses of Keene State College and Plymouth State University also required updating if they were to continue to attract students.

Faced with this reality, the University System of New Hampshire drew up a plan to beef up its science, technology, engineering, and math -- or STEM -- facilities. They called the effort the Knowledge Economy Education Plan, or KEEP.

KEEP was envisioned as a way to attract and keep strong students in the state, arming them with the skills to respond to New Hampshire's future workforce needs and emerging high-tech economy.

The university system appealed to the Legislature for capital appropriations to fund KEEP, and in two phases lawmakers committed more than $200 million over a 12-year period for the renovation and enhancement of the buildings.It was the single largest investment made in the university system in the history of the state.

Now the university system is asking for follow-up funding from the state for KEEP's successor program -- called KEEP-UP -- to address deferred maintenance projects throughout the system, which it says could cost upwards of $1 billion over the next two decades.

It has proposed a one-to-one match between the university system and the Legislature to the tune of $180 million each over the next three biennia.

But given the current spending climate, the likelihood that the Legislature will make such a large commitment seems a long shot, particularly on the heels of a 45 percent reduction in the university system's operating budget approved in the last budget cycle.

"(I'm) certainly not going to say they wouldn't get anything, but I'm sure it won't be anything like what they would like to get," said Rep. Gene Chandler, R-Bartlett, chair of the House Public Works and Highways Committee, who received a copy of USNH's report outlining its KEEP-UP request.

Dire situation

By most accounts, KEEP has been an undisputed success, but one that required the university system to shoulder a huge risk.

When the university system first appealed to the Legislature in 2000 for $185 million in state appropriations over six years, it amounted to publicly admitting to prospective students that its facilities weren't cut out for cutting-edge research or education.

"Our quiet little secret is we have serious infrastructure problems at UNH," Joan Leitzel, then-president of the university, told the Portsmouth Herald in early 2001. "One reason we haven't talked about it publicly is we don't want to scare away prospective students."

But the direness of the situation necessitated it, she said. Things had even gotten so bad that the UNH engineering program was at risk of losing its national accreditation, and the system could no longer scrape by appealing every two years for the state to fund a single project at a time, she said at the time.

"Once we have gone public with this, we won't retreat," Leitzel told New Hampshire Public Radio in 2001. "There is nothing short of full renovation that will remedy these buildings."

As part of its large lobbying effort, system officials led countless legislators on what were basically carnival-of-horror tours of the campuses' most antiquated buildings.

Hersman remembers the dean leading lawmakers through his classroom and citing it as the best example of "the pinnacle of high-quality research being done in the worst possible laboratory space."

The risk of going public paid off. The plan found widespread support, including from business leaders who saw the need to attract top students in critical shortage areas to the universities.

The Legislature appropriated $100 million for KEEP in 2001 -- pared down from the $185 million the university system had initially requested. It then approved another $109.5 million in a second phase in 2005.

On top of state money, the university system added about $40 million in supplementary funds, much of which came from private support.

"We worked hard with getting that private support," Ed MacKay, chancellor of the university system, told NHBR. "Most of that private support would not have come if there was not the fundamental commitment on the part of the state."

And over the last 12 years, the buildings have been brought totally revamped.

DeMeritt, once shrouded from prospective students, became "the showcase of the university," said Hersman. After being replaced at a cost of $20 million -- $18.8 million of which came through KEEP -- the facility now has "everything you could hope for in a modern science building."

Additions were made to Boyd Hall at PSU and the Putnam Science Center at KSC for labs and classrooms. Kingsbury was "completely revamped" and made engineer-friendly, said Berg.

After KEEP, said MacKay, the system saw a noticeable, and immediate, uptick in its enrollment of STEM students.

At Keene, the number of biology, chemistry and environmental studies majors all more than doubled between 2004 and 2010.

PSU had 72 graduate students in the sciences last year, up from just five in 2002, and undergraduate science enrollment more than doubled from 137 students to 311 over the same period.

And at UNH, enrollment in the College of Engineering and Physical Sciences has risen 75 percent in less than a decade.

"These efforts will pay real dividends in terms of enabling the state to sustain the growth of its economy," said MacKay.

Deferred maintenance

Following KEEP's success, USNH has now turned its attention to major and ongoing deferred maintenance projects in the form of KEEP-UP.

In 2007, USNH hired Boston-based VFA, an independent facility assessment firm, to assess its deferred maintenance needs. The firm determined that over the next 20 years, it would cost about $600 million just to maintain the existing level of deferred maintenance for academic buildings alone.

And that figure didn't include soft costs, like architectural fees and permitting or code compliance costs, which it said could push that figure to over $1 billion.

"We can't be complacent with where we are now. We need to continue to make these investments to attract individuals to this state," said MacKay.

In October, as directed by House Bill 25, the university system filed a report to the state Legislature outlining its funding request for KEEP-UP.

In that report, it proposes a dollar-for-dollar match between state capital appropriations and the USNH operating budget for deferred maintenance and general upkeep of its academic facilities. It seeks support starting at $50 million in fiscal year 2014-'15, $60 million in '16-'17, and $70 million in '18-'19.

"We can't be complacent with where we are now. We need to continue to make these investments to attract individuals to this state," said MacKay. "We cannot depend on our historical migration patterns. We have to do more to 'grow with our own.'"

Any formal requests for capital funding won't be submitted until spring 2013, he said.

But, said Representative Chandler, the university system has already gotten a considerable amount of funding over the last three capital budgets. Thus, he added, "It will come down to priorities like everything else."

"We can't overfund one particular segment of the state to the detriment of other things that need attention," said Chandler.

Plus, he said, most state-owned facilities are overseen by the Department of Administrative Services, which gives the state more of a say in deciding which buildings need work.

"We don't have that filter with the university system, so we rely on what they think their priorities are," said Chandler. "I think it could use a little looking at, because I'm not sure we're necessarily putting the right amount of money into the right buildings."

Right now, whether USNH will get the money it wants is still very much up in the air. "It's going to take some convincing," said Chandler. "But they're usually pretty good at that."

This article appears in the January 27 2012 issue of New Hampshire Business Review